The bitcoin blockchain will be splitting into two parts in the very near future. This is due to the fact that current technology can only keep up with so much memory and data in transactions, and with the impending future of bitcoin growing and being even more widely used it would not be able to keep up. Learn more about the transition and hear what Matthew himself has to say about it in the article below.

A new digital currency is about to be created as the bitcoin blockchain is forced to split in two

Members of the bitcoin community unhappy with its direction are forcing the blockchain to split.

This will create a new, separate digital token called Bitcoin Cash.

Every investor with bitcoins will receive the same number of Bitcoin Cash tokens, although not all exchanges will accept them.

“The inception of Bitcoin Cash may prove to be exactly what Bitcoin needs.”

On August 1, a “user activated hard fork” will take place. Members of the bitcoin community unhappy with the direction of the digital asset have set up an alternative “node” called Bitcoin ABC.

Nodes are required to send messages across the bitcoin network, but Bitcoin ABC will use a different set of rules, causing the blockchain (the digital ledger which records every bitcoin transaction) to fork and create two separate digital assets: the original bitcoin and Bitcoin Cash.

And because Bitcoin Cash will have all the history from the old blockchain, any investors with bitcoin tokens will receive the same number of tokens on the new blockchain.

However, Bitcoin Cash will likely only be worth a fraction of bitcoin. The original digital currency is trading around $2778.39 today, but future values for Bitcoin Cash on the website Coin Market Cap are just $288.35, or 0.103 of a bitcoin.

Why is bitcoin splitting?

The bitcoin community has been divided on how to solve its scaling issue. Currently, only 1 megabyte of transactions can be processed at any one time, leading to delays.

“Demand for Bitcoin has been so high in recent months, that those creating the cryptocurrency can’t keep up, slowing transactions,” Iqbal Gandham, U.K. Managing Director at eToro, said in a press statement on Monday.

“For bitcoin to continue to scale and have the potential to become a globally used currency, this slowdown in transactions has to be addressed.”

Bitcoin miners attempted to solve the scaling debate earlier this monthby signalling support for SegWit2X. This would introduce “segregated witness” to the block chains, which would move some of the data outside the main bitcoin network to increase its capacity, and later increased the number of transaction to 2 megabytes.

However, some investors, miners and exchanges are unhappy with the proposal and think that it doesn’t go far enough. Bitcoin Cash will increase the transaction limit to 8 megabytes.

“This means that the two sides that were once debating within Bitcoin, can instead apply their different views of what the cryptocurrency should be in two different blockchains,” said Hayter.

“So while this is a development that sparked from previous disagreements, it may come to end the scaling debate once and for all.”

Who is supporting Bitcoin Cash?

Bitcoin exchanges are divided on whether or not to support Bitcoin Cash. Several exchanges, such as BitMEX, Bitstamp and Coinbase, have said they will not support or allow trading of Bitcoin Cash on their exchanges, which means investors holding bitcoins on these sites will not receive any new tokens.

Some exchanges are also suspending bitcoin trading, withdrawal and deposits around the time of the fork. Hayter advises bitcoin investors to check for any statements issued by their exchange to find out whether or not they will receive the new token.

Bitcoin Cash may gain more support once it launches, according to Garrick Hileman, research fellow at the Cambridge Centre for Alternative Finance.

“Because millions of bitcoin users will automatically own Bitcoin Cash, and because a sizable number of wallets and exchanges (including some of the largest) have announced support for Bitcoin Cash, it is likely to live on for the foreseeable future,” he told CNBC via email.

“Bitcoin Cash could be significant but we won’t know more until after it launches. If it fails to sustain support then it could fade away.”

What will Bitcoin Cash be worth?

Aurélien Menant, founder and CEO of Gatecoin, a regulated bitcoin and ethereum token exchange based in Hong Kong, says parts of the community are referring to the new token as Bcash. He says the new coin will pose no threat to the future of bitcoin.

“Investors holding both bitcoin and Bcash may benefit from the speculative price gains in both cryptocurrencies following the hard fork, but adoption of Bcash as a network will be limited in the short term.”

Fran Strajnar, co-founder & CEO of data and research company Brave New Coin, says most cryto currency funds and investors are looking forward to receiving their free tokens.

“Most will likely hold as it’s free, just to see what happens or for hedging,” he told CNBC via email on Monday.

“However a majority of everyday users, traders and investors are vocal about market dumping their free tokens as soon as they can.”

Strajnar predicts the price for Bitcoin Cash could be hit heavily once it is open to trading.

“If there’s any legs at all to Bitcoin Cash or if the miners backing it deploy large scale and sustained attacks on bitcoin, then Bitcoin Cash may survive its initial violent birth.”

You may have previously seen news about Bitcoin in space. Now, technology created by Blockstream is pushing towards a “Blockstream Satellite” that can get bitcoin from space to anywhere on the planet. Learn about the progress and problems that Blockstream has faced thus far and what it could mean for the future of bitcoin in the article below.

Blockstream Is Using Satellites to Beam Bitcoin Down to Earth

Aug 15, 2017 at 14:59 UTC by Alyssa Hertig

Sounds fantastical? Maybe, but Blockstream swears it isn’t as crazy as it sounds.

Today, the bitcoin infrastructure company is launching Blockstream Satellite, an ambitious attempt to use leased satellites to beam bitcoin nearly anywhere in the world. Now in beta, bitcoin users in Africa, Europe, South America and North America can already use the satellites to download a working bitcoin node capable of storing the network’s entire transaction history.

But while complex conceptually, the company believes its end result can solve a real issue facing the $66 billion network – without internet, you can’t access bitcoin.

And this poses a problem for bitcoin proponents who believe the cryptocurrency could be especially beneficial to people without internet, who also generally live in areas with economic instability.

So, Blockstream decided to set its sights on a solution, and found it in space.

According to Blockstream CEO Adam Back, the project is all about putting bitcoin into the hands of those who “desperately need” it.

He told CoinDesk:

“There is some coincidence between countries with poor internet infrastructure and unstable currencies. The people who are in direct need of bitcoin are those who currently have unstable access to bitcoin. This project will address that problem, and, we hope, will allow many more people to use bitcoin.”

The vision

While running a full node is a cumbersome process, it’s nonetheless the most secure and trustless way of using the digital currency, and for individuals dealing with political and economic instability, this process could prove crucial.

But because full nodes require an Internet connection and 160 GB of free space, they are a rarity in some regions of the world. There’s allegedly only one man running a full node in all of West Africa, for example.

While Blockstream is now taking care of a way to download a full node, there are a few other choice technologies those that want to take advantage of the satellite will need.

Users will need a small satellite dish – if they already have a TV satellite, they could use that – and a USB to connect the satellite to a personal computer or a piece of dedicated computer hardware such as a Raspberry Pi. The rest can be accessed through free, open-source software, such as GNU Radio for establishing a radio connection.

“The cost to entry is extremely low,” said Blockstream’s head of satellite, Chris Cook. According to him, the package of equipment costs “a little under $100.”

Then, once users have those tools, they can pull bitcoin blocks from the satellite, building a bitcoin full node.

Cheaper technology

But while they’ll now be running a full node, it still takes some sort of Internet connection to make transactions over the network.

While many users in the areas Blockstream is targeting won’t be able to afford mobile data connection plans to initiate transactions, Back argued cheaper communications technologies, such as SMS or bi-directional satellite, could be used instead.

Transactions, he said, take up about 250 bytes, which wouldn’t cost more than one penny to transfer using such technologies.

In this way, Back’s vision of the satellite as bringing bitcoin even to people completely off-the-grid is theoretically possible. He offered the example of a small hut on the side of the road in the Sahara Desert in Africa, adding:

“With a perpetual generator out back with a satellite dish, a Raspberry Pi by the generator, a local wi-fi hot spot, and the necessary software set up, you could be transacting globally with bitcoin.”

Sounds like a lot, but Back argued that it would be pretty cheap, especially if costs are pooled between multiple people, like if an entire village shared the costs of setting up the infrastructure that they could then all use.

Monetizing space bitcoin

While it’s ambitious as is, Blockstream is taking that mission even further, adding more satellites as the year goes on, with the hope the most people on earth will be able to access a bitcoin satellite by the end of the year.

“The only people that won’t be covered are those in Antarctica,” Back said.

While the project is technically feasible, though, is it financially so?

Bitcoin is admittedly a different beast, but other Internet space projects don’t have a great track record so far. Although, Blockstream does have plans to monetize the satellite.

According to Back, Blockstream will eventually release an API for developers and companies to send data over the satellite connection for a small bitcoin fee.

He concluded:

“That might allow a smartphone wallet that sends messages to send it via satellite or some application to send messages via satellite. That’s a way to monetize the infrastructure and to expand to more services on it.”

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Blockstream.

You all know that Blockchain technologies have helped the finance and investment world evolve. Blockchain is associated with more than you think in money processing! So, what would happen if Blockchain technologies had a role in other industries like health care or engineering? The article below explores health care specifically. Learn about the capabilities Blockchain has that can associate with medical practice and what the future could hold.

Blockchain-Styled Solutions for Health Care on the Rise

by Rebecca Campbell | Blockchain | March 30, 2017

Blockchain technology has the potential to transform healthcare services just as it’s doing within the finance sector. Through a decentralized and encrypted network, the healthcare industry can share, store and distribute information easily and transparently, producing a streamlined system that is resistant to fraud. According to the U.S. Department of Justice, in 2016, a Medicare fraud scheme cost around $30 million in losses. A report from U.S. health startup Color Space Post, a privately owned, consumer-led health company that’s leveraging blockchain technology to develop a new healthcare infrastructure, states that “blockchain technology could make a massive impact on both the administration costs and fraud.”

And yet, even though it’s still in its infancy within the healthcare industry, blockchain technology is already helping to transform it.

Healthcoin: The First Blockchain-Based, Globally Scalable Platform for Rewarding Prevention

Founded in 2016 by CEO Diego Espinosa and COO Nick Gogerty, Healthcoin, which won the award for best private blockchain at this month’s CoinAgenda in Puerto Rico, utilizes blockchain technology to allow employers, insurers, individuals and governments across the globe to manage people’s lifestyle change and incentivize the prevention of adult onset diabetes. According to the American Diabetes Association, latest figures show that in 2012, approximately 29.1 million Americans, or 9.3 percent of the population, had diabetes.

Speaking to Bitcoin Magazine, Espinosa said that Healthcoin originated when he reversed his borderline Type 2 diabetes. Despite living a healthy lifestyle — a low-fat diet and running 25 miles per week — he found his A1c kept going up. This is a blood test, also known as hemoglobin A1c or glycohemoglobin test, that provides information on a person’s average levels of blood glucose. A normal A1c level is less than 5.7 percent. Espinosa said that after deciding to experiment with a low carb and no sugar diet, he found his biomarkers went back to normal, which helped plant the seed for Healthcoin.

“When I saw my blood labs, the idea for Healthcoin was born: shifting the focus of prevention to ‘moving the needle’ on biomarkers as opposed to just measuring steps and other ‘inputs,’” he said.

Still in its pre-launch, Healthcoin will work by tokenizing measurable improvements in health. Espinosa says that users will submit their information through their doctor, employer, insurer biometric screening program or even health apps. As it is biomarker-based, Healthcoin takes in information relating to A1c, blood pressure and high-density lipoprotein (HDL) cholesterol, which are precursors to Type 2 diabetes and heart disease.

“When a user’s biomarkers improve, the blockchain issues them a token,” said Espinosa. “This token is equivalent to a ‘certificate of proven prevention.’”

By building a plug-and-play rewards and data analytics layer for prevention, Healthcoin is aiming to create a network that engages every level, from users to doctors and international health organizations to governments. Through blockchain technology, the network trades in a market for rewarding proven prevention readily, verifying when someone has prevented their disease over their lifetime.

Once launched, Espinosa says that employers and insurance companies can offer to pay users a pre-set reward for the tokens while the underlying biomarker database can be mined by the pharmaceutical industry to help in drug discovery.

“Healthcoin will shift the focus of healthcare to generating proven prevention outcomes,” he adds. “The goal is to have millions of people generating healthcoins across the globe and thus turn the tide on the diabetes epidemic.”

DeepMind Health: Bitcoin-Style Verifiable Data Audit

London-based DeepMind Health is planning to build out a new technology. Loosely sharing some of the same properties as blockchain technology, it is designing a system to track patients’ records in real-time, allowing clinicians to predict, diagnose and prevent serious illnesses.

Identified as the Verifiable Data Audit, the idea is to develop a digital ledger that will record what data has been used with DeepMind, claiming that the hospital remains in control.

According to the NHS Confederation, every 36 hours the U.K.’s National Health Service (NHS) deals with over one million patients. However, a report from the U.K.’s Daily Mail newspaper states that in 2016, over 205,000 medication errors were made in the prescribing, dispensing or administering of drugs throughout the NHS, and that medication errors are increasing by 6 percent a year.

DeepMind Health, which is collaborating with the London’s Royal Free Hospital, has created a kidney monitoring app. Called Streams, it is a clinical application that aims to improve care, directing clinicians to patients who are at risk of or have a serious condition of acute kidney injury (AKI).

In a blog post, DeepMind Co-Founder Mustafa Suleyman and Head of Security and Transparency Ben Laurie cite an example focusing on the Royal Free Hospital partnership to explain how the Verifiable Data Audit will work each time there has been any interaction with the data.

“Each time there’s any interaction with data, we’ll begin to add an entry to a special digital ledger. That entry will record the fact that a particular piece of data has been used, and also the reason why — for example, that blood test data was checked against the NHS national algorithm to detect possible acute kidney injury.”

They add that like blockchains the ledger will be append-only so that once a record of data use has been added, it can’t be removed. It will also ensure that third parties can determine whether entries have been tampered with.

However, it also differs from blockchains. According to Suleyman and Laurie, blockchain technology has some wastefulness associated with it, such as that most blockchains require participants to carry out complex calculations that involve high energy costs. Some estimates state that the energy used could be as much as the power consumption of Cyprus.

“This isn’t necessary when it comes to the health service, because we already have trusted institutions like hospitals or national bodies [that] can be relied on to verify the integrity of ledgers, avoiding some of the wastefulness of blockchain [technology],” they add.

DeepMind is also changing the “chain” part of blockchain technology and replacing it with a tree-like structure known as a Merkle tree or hash tree. Every time an entry is added to the ledger, it will produce a value known as a cryptographic hash, which recaps all entries made in the audit.

“Now we have an improved version of the humble audit log: a fully trustworthy, efficient ledger that we know captures all interactions with data, and which can be validated by a reputable third party in the healthcare community.”

In the long-term, the team is hoping to expand the system to individual patients or patient groups so that they can view how and where their data is being used.

Many Americans have a least some money invested in the stock market, mutual funds or businesses. For those who know investing well know that expanding a portfolio can be advantageous. This is where Blockchain comes in. Did you know you can invest in certain companies that have invested in Blockchain technology? If you do, you are, in turn, exposing your portfolio to Blockchain! Learn what some of those companies are and how you can begin dipping your toes in the Blockchain pool.

How to Slip Some Blockchain Exposure Into Your Portfolio

by Bradley Fink | Investing | June 9, 2017

Over the past year, there have been fortunes made with winning investments like bitcoin, ether and ripple. And yet many people don’t know how to buy a single bitcoin. If you are new to digital assets, you may find it a tap dance just to get your money in, between digital wallets, online exchanges and questionable regulations. If you are perplexed by blockchain technology and feel more comfortable having your money in traditional markets, there are companies you can invest in to get the technology in your portfolio. Companies like IBM and Microsoft are betting heavily on blockchain tech, and are positioning themselves as leaders for the Internet of Everything.

Here are some familiar, publicly traded companies that have invested in blockchain technology:

Microsoft (MSFT), Nasdaq

Microsoft has been sponsoring blockchain technology and is now a founding member of the Enterprise Ethereum Alliance (EEA), along with dozens of other companies including J.P. Morgan and Toyota. The alliance was formed to create standards for Ethereum in business use cases and to collaborate for a blockchain-based online marketplace. Microsoft’s Azure cloud computing service platform also supports Ethereum, offering Blockchain-as-a-Service (BaaS) tools for app developers.

Quoted in the MIT Technology Review, Marley Gray, who leads Microsoft’s blockchain efforts, said, “We see a huge opportunity here. Enterprise-scale and enterprise-grade infrastructure is going to be vitally important for this financial infrastructure that will be woven using blockchain over these next few years.”

As Microsoft adds development tools and industry expertise, its early bets on blockchain tech should grow in years to come. The stock is now sitting at a 52-week high in the $72 range, with a trailing annual dividend of $1.53 per share.

IBM (IBM), NYSE

With a different approach, IBM has joined Hyperledger in its foray onto the blockchain. Governed by corporations, Hyperledger has five blockchain and distributed ledger projects in incubation. The one that IBM is most invested in is called Fabric, a blockchain layer for enterprise solutions, which also has support from companies including Accenture, Airbus, American Express, CME Group, Intel and others.

Similar to the Microsoft Azure developer platform, IBM also offers blockchain building tools for corporations. Shares of IBM are now trading around $152, with a trailing annual dividend of $1.40 per share.

Overstock.com (OSTK), Nasdaq

In 2014, Overstock.com started a VC fund to manage investments in firms leveraging blockchain technology. Named Medici Ventures, the fund now owns a 2.5 percent stake in Factom, which may become a leading data hashing company. And in April 2017, Medici invested $428,000 in Bitcoin company Ripio, a leading digital wallet and exchange in Argentina. Medici has also invested in several platforms related to equity trading.

Overstock.com CEO Patrick Byrne has long been a proponent of Bitcoin and blockchain technology. In 2016, he announced a new subsidiary blockchain-based equity trading platform named t0, which he thinks could revolutionize equity trading. t0 combines cryptographically secure distributed ledgers with existing market processes to reduce time and costs, and increase transparency, efficiency and auditability.

Medici continues to invest in promising blockchain startups. The company’s stock is trading in the $14.50 range, with a market cap of only $363 million.

FastForward Innovations (FFWD.L), London Stock Exchange

FastForward Innovations is a VC firm investing in emerging technologies. In 2015 FastForward made a £279,000 ($431,300) investment in Factom, which in 2016 was revalued at £560,000 ($709,800) after another successful funding round. The latter round included funds from well-known investor Tim Draper, who stated, “Governments also need better security from hackers, and the blockchain avails them of better security than they currently have. I believe that the Factom team has the opportunity and the potential to build a company greater than Oracle and Palantir and IBM combined.”

FastForward is also invested in digital gaming, wearable technology and online media. The company’s stock is currently trading at £12.65 ($16.24).

Bitcoin Investment Trust (GBTC), OTC

If you want exposure to bitcoin and only bitcoin, you can buy into the Bitcoin Investment Trust through your traditional brokerage account. A financial product of Grayscale, which is owned by Digital Currency Group, GBTC is meant to track the bitcoin market price on behalf of investors, who then don’t have to buy and safekeep bitcoins for themselves.

The fund’s bitcoins are kept in deep storage vaults with Bitcoin company Xapo, where they are protected by intense cryptographic and physical security. With $390 million in assets under management, the fund has a market cap of $882 million on Yahoo Finance. Recently, the price of the fund has soared above the market price of bitcoin, which shows an active demand for a bitcoin investment vehicle. Currently trading at $516, GBTC is up from $101 just six months ago.

Blockchain Capital

Though not publicly traded, if you would like to dabble in digital assets but don’t know which projects to invest in, Blockchain Capital offers an interesting way to play this space. Calling themselves the “First Ever Digital Liquid Venture Firm,” Blockchain Capital invests in promising blockchain projects and the platforms that support them, and now has what looks to be a strong portfolio. Their holdings include industry leaders Blockstream, Bitfury, Coinbase, Ripple, ShapeShift, BitPesa and more.

What is unique about Blockchain Capital is that they have their own digital token called BCAP, which represents an indirect fraction of non-voting interest in their Digital Liquid Venture Fund. By buying the BCAP tokens, you will own a share of the fund of companies that Blockchain Capital invests in. When the fund released these tokens to the public earlier this year, the entire offering of 10 million BCAP sold out in less than six hours, raising a total of $10 million USD at $1 per token. Today the token trades on Liqui.io for $2.25.

This article is for general information purposes only and should not be taken as investment advice. Investors should conduct their own due diligence and consult with a qualified tax/investment professional before attempting anything described in this article.

Agreements and contracts hold people accountable for their actions and promises made. As technology advances, contracts are becoming ‘smarter’ as they are on computers and are input-based. However it still takes human actions and observations to carry out a contract and hold those on the other side of it accountable. Continue reading the piece below which compares this all to Blockchain and gives thoughts on how ‘smart’ smart contracts are.

David M. Adlerstein is counsel at New York City law firm Wachtell, Lipton Rosen & Katz, where he focuses on mergers and acquisitions, corporate, securities law and regulatory matters.

In this opinion piece, Adlerstein discusses the current state of smart contracts, providing what he believes is a useful definition for the concept that can help answer key questions about the emerging technology.

I invite the reader to perform a simple experiment: Ask five people with reasonable working familiarity with blockchain to list five key potential benefits of the technology.

I’d wager that at least three will include “smart contracts” on that list. Ask that same group to define what a smart contract is, and you’ll get at least three different answers (likely ranging from an agreement for the transfer of an asset on a blockchain, to the simple execution of code on the blockchain, to the koan-like “code is law”).

While it is clear that technology (notably blockchain) is opening new horizons for the creation and performance of legal agreements, there is no consensus as to what people mean when smart contracts are discussed. This naturally sows confusion, including as to the legal status of smart contracts.

This article attempts to enhance discussion by positing a working legal definition of smart contracts, and, using that definition as a framework, offering preliminary answers to three fundamental questions of interest to technologists and lawyers alike: Are smart contracts contracts? Are smart contracts smart? And are smart contracts legally recognizable?

The working definition of a “smart contract” is a consensual arrangement between at least two parties for an automated, independent commercial result from the satisfaction or non-satisfaction, determined objectively through code, of a specific factual condition.

A few preliminary observations on this working definition. First, it is prescriptive; I do not contend that this describes general current use of the term “smart contract.” Moreover, while blockchain promises to facilitate arrangements of this type, I submit that a smart contract can exist outside of the context of a blockchain (and the foregoing questions remain pertinent as to non-blockchain-based arrangements) and that a smart contract can have as its subject matter something other than the custody or transfer of an asset.

Importantly, a non-consensual or single party arrangement is, per my definition, not a smart contract (consistent with the legal conception of a contract, as discussed infra). An arrangement where either effecting the result of the arrangement or making a determination of whether that result will occur requires human intervention beyond the bounds of the arrangement is also not a smart contract.

Finally, the “independent commercial result” is a necessary element of the definition, for the simple reason that computer code always consists of deterministic “if-then” statements (for example: if I am playing a driving video game and move my control pad to the left, then the car in the game will move to the left – but this is obviously not a smart contract).

Are smart contracts contracts?

Within the American legal system, a contract is “an agreement between two or more parties creating obligations that are enforceable or otherwise recognizable at law.” For an agreement to be enforceable or otherwise recognizable at law (as opposed to, say, an unenforceable agreement with me that senior citizens shouldn’t invest their life savings in dogecoin), three particular elements must be present:

An offer (basically, expression of a willingness to enter into a binding agreement subject to the offeree’s acceptance of the proposed terms);

An acceptance of those terms

A mutual exchange of value – so-called “consideration.”

Legally binding agreements identify the parties and subject matter with particularity, and include mutual promises, which may be absolute or subject to conditions. A legally binding agreement may be written, including, as discussed below, in an electronic form, or oral (except in limited circumstances).

And finally, the legal system offers remedies for the breach of a legally binding agreement, such as a requirement to pay damages or, in certain circumstances, a court order mandating performance under penalty of law.

My contention, as per the working definition posited above, is that smart contracts can be, but are not necessarily, legally binding contracts.

In Nick Szabo’s classic conception, a humble vending machine transaction is a proto-smart contract, consistent with the working definition: insert a dollar and automatically receive a can of soda. Now in the case of this vending machine transaction, there actually is a legally binding contract.

Stocking the vending machine with beverages and inviting passersby to insert a dollar to purchase one constitutes an offer. Actually inserting that dollar constitutes acceptance. The dollar and soda, respectively, are consideration. And while it would be petty to sue over it, if the machine eats my dollar without giving me a soda, I would have legal recourse.

But a smart contract may represent only a component of, or means of performing a component of, a legally binding contract, rather than an entire contract.

Per the offered working definition, the feature of an adjustable-rate mortgage providing for automatic deductions of mortgage payments due from a bank account would constitute a smart contract: if the reference interest rate changes, the amount of the payment will automatically adjust upwards or downwards.

But this adjustable payment mechanism is only a component of the mortgage agreement, not the agreement as a whole, which would be evidenced separately. For example, this payment arrangement, though it implies the existence of offer, acceptance and consideration, does not itself fully evidence the existence of those components, or other key terms of the mortgage, such as an identification of the mortgaged property, disbursement of the actual mortgage loan or resolution of disputes.

The writing evidencing a legally binding agreement can be electronic (with an electronic “click-through agreement” representing a typical example). In the context of blockchain technology, it is possible to record an agreement – or a cryptographic hash of an agreement – as metadata within a blockchain.

While this may in and of itself offer distinct advantages, particularly in establishing for posterity what the definitive terms of an agreement are, recording a legally binding agreement within a blockchain does not, without more, create a smart contract.

Only to the extent that performance of that agreement is automated through code based on satisfaction or non-satisfaction of an objective precondition is there a smart contract.

Are smart contracts smart?

While contractual performance is today often automated for certain uses (for example, periodic auto-payments), sophisticated commercial contracts are rife with “if/then” provisions, dependent on the state of objectively verifiable facts, often requiring manual administration and susceptible to misapplication or inadvertent non-application.

Thus, smart contracts can be said to be “smart” to the extent they offer the efficiency of automated contractual performance and reduce the risk of human error and prospects of a dispute.

But barring quantum improvements in artificial intelligence, the utility of smart contracts is limited to situations where the satisfaction or non-satisfaction of a particular factual condition is objectively ascertainable through programmatic reference to an extrinsic data source (an “oracle”). In the context of commercial agreements, a computer can be programmed, say, to use an oracle to ascertain whether LIBOR has increased or decreased.

This is not to say that smart contracts are simple; indeed a smart contract could encompass a range of complex results based on multiple inputs. But a computer cannot (today, at least) be programmed to accurately ascertain, for example, whether or not a party to a merger agreement has used reasonable best efforts to obtain a regulatory approval. Viewed through this prism, smart contracts aren’t actually smart; they are deterministic.

The promise of blockchain technology and smart contracts is, then, at root not about any kind of native intelligence or computers as lawyers.

Rather, it is about blockchain’s potential to offer efficiency gains by greatly expanding the scope of contractual matters for which performance can be automated as the nexus among assets, service capabilities and the blockchain grows (especially with the advent of the Internet of Things).

However, many aspects of sophisticated commercial agreements are not susceptible to automation, including matters requiring subjective human judgment, the rendition of sophisticated or human-intensive services or the resolution of disputes.

Accordingly, while some relatively simple agreements could have essentially all of their performance automated (including by blockchain), for more sophisticated agreements only discrete elements are likely to be automated in the foreseeable future; thus, “smart contractual provisions” might be a more appropriate term.

By analogy, blockchain technology will for the lawyer be like power tools to the carpenter, not like the self-driving car to the chauffeur.

And given that computer code is as susceptible to error as prose and that legally binding agreements must be subject to judicial enforcement, as the use of smart contracts grows, in the context of sophisticated agreements providing for ongoing performance, it will be necessary to maintain safety valves (in the context of blockchain technology, perhaps in the form of private keys) for a court or arbitrator to be able override smart contractual provisions.

In other words, irrevocable automation with no possibility of intervention by a “smart human” would be perilous.

Are smart contracts legally recognizable?

Blockchain technology has increasingly become a point of state legislative focus (notably in Delaware), and there have been recent efforts to specifically authorize smart contracts in some states. Of particular note, in March 2017, Arizona enacted legislation legalizing smart contracts (defined in the law as “an event-driven program, with state, that runs on a distributed, decentralized, shared and replicated ledger and that can take custody over and instruct transfer of assets on that ledger”).

Unlike the working definition proposed above, Arizona defines smart contracts with specific reference to blockchain technology, and limits the applicability to the custody and transfer of assets – a narrow definition, but one well suited to many burgeoning use cases of the technology.

And new blockchain-related legislation in Nevada was initially proposed including a definition of smart contracts as an “electronic record … which is verified by the use of a blockchain” (but the legislation as enacted dropped the definition).

Even without welcome state legislative initiatives, there are existing common law and statutory bases for a court to enforce a legally binding agreement – or component of a legally binding agreement – existing in electronic or code form, as long as that form is reducible to writing:

Under longstanding common law contractual principles, extrinsic writings may be specifically incorporated into a legally binding agreement. Accordingly, insofar as smart contracts represent components of legally binding agreements, they are binding if specifically incorporated by reference into a written agreement. For example, in the case of a written loan agreement providing for a pledge of collateral where the pledge is reflected in a blockchain and would be automatically released on repayment of the loan, an agreement referring to the contemplated automatic release and including an excerpt from the applicable executable code in an annex should be enforceable by a court.

Under the federal Electronic Signatures in Global and National Commerce Act (2000), a contract, signature or record is not considered unenforceable merely on the basis of being in an electronic format (but the record must remain capable of being reproduced for later reference). While the author is aware of no case specifically considering the question, there is no reason to conclude that an electronic contract in code and not prose would be unenforceable, so long as the parties, subject matter and terms are clearly articulated in a manner essentially translatable to English, like a foreign language, and there is evidence of mutual consent in deploying the code in question, with each party giving consideration.

Under the Uniform Electronic Transactions Act (adopted by 47 states), transactions may be conducted by electronic means, such that the act gives legal recognition to electronic signatures, records and contracts.

Under Article 9-105 of the Uniform Commercial Code (the law adopted by all 50 states governing secured transactions) a secured party has control of “electronic chattel paper” if a system for evidencing the transfer of interests reliably establishes the secured party as assignee (among other things, a single authoritative copy of the record must exist which is unique, identifiable and generally unalterable).

Terminology aside, new technology (and blockchain in particular) promises to have a far reaching impact on how legal agreements are evidenced and performed. But existing concepts of what constitutes a legally binding agreement will endure, as will the human element in negotiating and administering sophisticated commercial agreements.

There is potential that there will be two kinds of Bitcoin tokens in the future after a coin-split. For those using Bitcoin who do not know what this could mean for Bitcoin in general and how to adjust with the growing pains the article below will walk you through it all.

A Bitcoin Beginner’s Guide to Surviving a Coin-Split

There is a chance Bitcoin will experience a coin-split soon. If a majority of miners (by hash power) switch to Bitcoin Unlimited and decide to mine blocks bigger than one megabyte, while at least some users stick to the current Bitcoin protocol, the network and blockchain can split in two. In that case, there may be two different types of Bitcoin tokens: “BTC,” which follows the current Bitcoin protocol, and “BTU,” which follows the new Bitcoin Unlimited protocol.

The good news is that each bitcoin would effectively be copied onto the Bitcoin Unlimited chain. If you hold bitcoin right now, you will hold both BTC and BTU after a split.

The bad news is that a coin-split can be messy and risky. This is mainly because, at first, all BTCs and all BTUs will be stuck together. You will need to separate them somehow; otherwise you can lose your BTC or your BTU.

This guide will provide you with the basics to stay safe during a coin-split, and make sure you make it to the “other side” with both your BTC and BTU intact.

Author’s note: If you want to play the BTC/BTU markets as soon as possible and you are fine with taking risks, and/or you really know what you are doing, this article is probably not for you. (Perhaps try this Electrum article instead.)

If you mostly just want to make sure not to lose your BTC or BTU, read on …

Before the Coin-Split (That’s Now)

First of all, be aware that a coin-split is a high-risk situation. There is a real chance a sort of cyber-battle will break out between the two camps, perhaps even escalating to the point where bitcoin’s exchange rate(s) drops sharply, possibly to zero. Make absolutely sure you are not holding more value in bitcoin than what you are willing to lose.

If you do decide to hold on to your bitcoins, the single most important piece of advice is this: control your own private keys.

If you are storing your bitcoins on an exchange, in a custodial wallet like Coinbase, Circle or Xapo, or on any other service that holds your private keys for you, you may or may not eventually receive coins on both ends of the chain. Several exchanges have so far suggested you may but have made no guarantees. And at least one exchange, GDAX, has explicitly indicated you may not.

If you’re using any of these kinds of services to store your bitcoins, you need to create your own wallet. Send your bitcoins to this new wallet; this wallet now holds your private keys.

What kind of wallet you want to use is up to you. That said, here are some basic solutions:

If you don’t care about transacting with either BTC or BTU anytime soon, and really just want to keep both as a long-term investment, printing your private keys on a paper wallet is one option. This option, however, is only really secure if you follow strict security precautions, which you can find here.

Another option is to get a hardware wallet. Any of the hardware wallets listed on bitcoin.org will keep your private keys secure. One hardware wallet provider in particular, Trezor, has explicitly acknowledged that users will have access to their coins on both ends of the chain if a coin-split happens.

Regular wallets are about as secure as your computer (or phone) is. Since most computers and phones are not all that secure, these are not ideal for large amounts. With that in mind, all mobile wallets and desktop wallets listed on bitcoin.org will store your private keys for you. Additionally, a full node like Bitcoin Core or Bitcoin Knots gives you a little extra security during a coin-split, as you’ll see below.

In any case: Make sure you make backups of your keys! Most wallets require you to do this when installing; don’t skip this step.

During the Coin-Split

The first thing to note is that Bitcoin Unlimited has not set a “flag date” to fork. This means that theoretically, a fork could happen at any time. Realistically, however, it will depend on miner coordination, and it will probably be obvious to even casual Bitcoin observers when a fork is close to happening.

If Bitcoin Unlimited does fork, things could get messy for anywhere between a couple of hours to a couple of days, or longer.

Unfortunately, Bitcoin Unlimited currently does not include “replay protection.” This means that post-fork, transactions on both sides of the fork will look identical. If a transaction is picked up by both networks — for example, because the receiver of a transaction re-transmits the transaction on the other network — that transaction may be valid on both chains. This is called a “replay attack.”

As such, spending coins on one end of the chain could make you accidentally spend the equivalent coin on the other side of the chain. Instead of paying someone only BTC, you may unintentionally send BTU as well — or vice versa. This is how the BTCs and BTUs are “stuck together.”

The best way to prevent replay attacks is simple: do not send any transactions. Not until it is clearer to everyone what the post-fork situation looks like.

If you use Bitcoin Core or Bitcoin Knots as a wallet and you want to accept BTC, that should still be fine. (Someone who didn’t read this article may accidentally send you the equivalent in BTU, though. If this happens, you should probably return the funds later on.)

Bitcoin Unlimited, on the other hand, does not include “wipeout protection.” If the amount of mining power on the BTC chain ever overtakes the BTU chain, the entire BTU chain will be discarded (unless users on the BTU chain coordinate fast enough to prevent this in unconventional ways).

Unless and until it is absolutely clear that Bitcoin Unlimited emerges as a definitive winner forever, accepting any BTU is very risky, and you probably shouldn’t do it at all.

After the Coin-Split

If both chains survive, and you control your private keys, you will have coins on both sides of the fork. But as mentioned, it will be tricky to spend coins on one chain without accidentally spending the equivalent on the other side.

Fortunately, there are ways to avoid these replay attacks. The most straightforward solution requires brand-new coins, mined after the split. These new coins are the only coins that do not exist on both chains and cannot, therefore, be spent on both. Combining these new coins with old coins effectively splits the BTC from BTU.

This coin-splitting can, and probably will, be a bit complex. But some exchanges will likely set up coin-splitting services and take care of most of the complexity behind the screens. You’d just need to send your bitcoins to an exchange, and the exchange will credit your account with BTC and BTU. (They should even replay the transaction for you, to make sure they indeed receive both your coins and can split them for you.) If you want, you can now also sell your BTU for BTC (or fiat currency), or the other way round.

There may also be other solutions to split your coins in the event of a coin-split, perhaps even trustless solutions. But that remains to be seen.

After the split, there will probably be wallets for both coins soon enough. Of course, you may need to upgrade your existing wallet or download a new wallet if and when this happens. This also remains to be seen. (Do not accept any transactions on your wallet before this is clear.)

Further specifics on what to do after a coin-split will be announced on Bitcoin Magazine (and most likely on bitcoin.org and other sources of information) if and when a coin-split occurs and we have a better understanding of the post-fork situation.

Oh, and when you, years from now, want to use the funds stored on your paper wallet, don’t forget you now own both BTC and BTU! (Wallets like Electrum and Blockchain allow you to upload the private keys, and you’ll probably need to go through the same splitting ceremony.)

If only one chain survives, operations should continue at some point. However, it’s not exactly clear what this post-fork landscape will look like. Perhaps you’ll have to upgrade your wallet. This will also be announced on Bitcoin Magazine if and when it comes to it.

If neither chain survives, the Bitcoin experiment has failed, and your private keys will probably be worthless.

So, to Recap …

1. Control your private keys.

2. To be on the safe side, avoid any transactions shortly after the split. (If you must accept BTC, use Bitcoin Core or Bitcoin Knots as a wallet.)

http://matthewroszak.com/wp-content/uploads/2016/07/logo.png00Matthew Roszakhttp://matthewroszak.com/wp-content/uploads/2016/07/logo.pngMatthew Roszak2017-06-28 15:28:542017-06-28 15:28:54What To Do If There's a Bitcoin Coin-Split

The majority of transactions currently utilize banks. However, in the future this could change as blockchain technology further develops allowing people to complete peer to peer transactions more often. Predictions are being made that a blockchain economy could outperform a web economy in years to come. Learn more about this speculation in the article from Computer Weekly below.

According to Mougayar, money is one area the web has not tackled in a “native” way, with most money transactions still going through banks rather than being peer to peer (P2P) in nature.

“The banks have led us to believe that we still need them, but in reality they are just updating each other’s ledgers,” he said, pointing out that this is what blockchain technology enables, but without the need for a third party such as a bank.

The best-known application of blockchain technology is bitcoin, which Mougayar said “at its core” is really about P2P transmission of value, with cryptology being a critical component that secures both the stored data as well as securing and validating transactions.

Bitcoin and other cryptocurrencies, he believes, will become an increasingly popular way of transferring value, with up to 900 different cryptocurrencies available already.

Blockchain is also about new, emerging P2P infrastructure that is truly decentralised, said Mougayar, in contrast to many web-based applications such as Facebook that have not remained true to the original decentralised concept of the World Wide Web.

Blockchain, he said, provides a clear and quick way of getting transactions settled without involving a third party. “If you were to dumb it down, the blockchain is a just series of API [application program interface] calls to verify something – a settlement, an identity. But because it is immutable and each transaction just adds to what has gone before, transaction history remains intact. It is an excellent record-keeping technology,” he said.

Cryptocurrencies go beyond money use

Cryptocurrencies, said Mougayar, are not just about money. “They can represent a function, work and attention, which means new companies publishing user content could compensate users by enabling them to earn tokens for giving attention to content or attracting attention to content.

“This means users could earn cryptocurrency that can be exchanged for goods and services, which is already being implemented by companies such as Steemit, where everyone gets paid for creating and curating content,” he said.

Most of what has been happening around blockchain has been about the development of the core, which has been a largely “technical story,” said Mougayar.

“A lot of the activity is very technical, about the nuts and bolts of the infrastructure, but we are now going to get more into the app development and the story is going to be more about the applications, which is how the web started. First we had to get the infrastructure and the standards, and then the applications came,” he said.

Developers should prepare for ‘inevitable’ blockchain change

Mougayar urged organisations to encourage their developers to learn blockchain languages in preparation for the changes that he sees as inevitable.

“The fact that there currently around 10 million Java developers in the world and only 30,000 blockchain developers tells you were we are and where we need to be,” he said.

Standards are very important in the era of technology, said Mougayar, and although there are only few blockchain-standards, the ERC20 standard for issuing tokens or cryptocurrency is an important one because it is the main reason so many ICOs and cryptocurrencies exist. “When you put standards in the market, adoption skyrockets,” he said.

However, Mougayar cautioned against trying to regulate the blockchain prematurely for fear of stifling innovation around this technology. “Blockchain is just a baby right now. Let’s wait until it grows to be an adult, and then we can regulate it,” he said.

Going forward, he said, the blockchain is going to disrupt the database, a new type of virtual environment is going to emerge, there will be a new way of proving the identity of people and the ownership of value, and tokens and smart contracts will become the new language.

“We will enter the new blockchain economy in the same way that we entered the web economy 20 years ago,” said Mougayar.

Lately, Bitcoin has been progressing financially but not technologically. Many are debating why this is. The article below from CoinDesk goes into the speculation and thinks about what the future might be for Bitcoin. Investors may choose to remain optimistic or become a little more reserved. Read more about this below.

$1,700? Bitcoin’s Price is Up Even as its Tech Progress Stalls

Sometimes referred to as the ‘honey badger of money’ (after a famous viral video), bitcoin enthusiasts may find this comparison particularly apt of late. Since the beginning of the year, the network’s value has nearly doubled – even while the community continues to be mired in debate.

Market observers so far have offered a wide range of reasons for this uptick, though not all of them are good, with increasing prices causing concerns that the industry as a whole is entering a speculative bubble.

Supply and demand

Still, not everyone believes the boost is due to speculation.

Redwood City Ventures founder Sean Walsh, for example, sent CoinDesk a bullet-pointed email summarizing the various global developments that could be contributing to the bitcoin price surge. He believes developments in South Korea, Japan, Russia and China have all contributed.

The price surge, according to Walsh, is simply supply and demand.

“Bitcoin is dramatically more scarce than most people realize, especially in the context of its total addressable market of nearly 3 billion internet-connected adults,” he continued.

Walsh framed the situation simply as one where the cryptocurrency is seeing increased demand, which looks to only increase in the future:

“Once the global race to own bitcoin commences, the tiny supply of new bitcoins (just 54,000 new coins per month) will be completely overrun by demand,” he said, adding:

“There just aren’t anywhere near enough coins to go around, and pre-existing holders will grasp ever more tightly into this surging market, as perennially dictated by human nature.”

Tensions subsiding

Still, to those following day-to-day technical developments, it might seem odd that the digital currency’s price has seen such an upswing amid its scaling debate and a stalled upgrade known as SegWit.

Kristov Atlas, a security engineer at wallet and data firm Blockchain, for example, wasn’t able to find technical reasons for the uptick in demand.

He told CoinDesk

“I don’t see how the price increase could relate to tech changes; no big changes in long term projects like Lightning lately, and the block size stalemate is still status quo.”

“[It] must be something outside bitcoin that investors have changed their minds about,” he suggested.

While developers, admittedly, might not be experts on economic market conditions, those that have been in the industry for a while are perhaps more aware of how technical developments could contribute to bitcoin’s price.

When asked, some argued the state of the technology could have something to do with the recent increase, though, perhaps in surprising way.

For example, bitcoin’s block size debate took a weird turn a couple of months ago, when discussions about the possibility of forking bitcoin into two networks reappeared. This time around, some miners and developers suggested the idea of destroying the chain that didn’t follow along with the majority of hashing power.

This has yet to happen, though, and worries about such an event happening have since died down. Some wonder if this could have given the price boost.

“I think part of the rally is due to increased confidence that the risk of a contentious hard fork has all but evaporated,” Reddit moderator BashCo said.

Yet some expect to see a ‘correction’, where the price dips to a more reasonable place.

The emotion factor

The idea that raised tensions contribute to price swings fits with bitcoin developer and Nakamoto Institute director of research, Daniel Krawisz’s view that the price has more to do with emotions.

“The price of bitcoin never makes sense and it doesn’t have very much to do with the tech,” he said. “It’s about emotion. It’s about greed.”

Krawisz also sees the price more aligned with bitcoin’s original value proposition of giving users more control, rather than more granular tech additions or debates.

“It’s not the new features of bitcoin that matter. What matters are the old features. People keep moving into bitcoin because it’s a better alternative than their own national currency,” he said, adding:

Though, perhaps echoing other developer’s sentiments about a reduction in fear, Krawisz went on to argue that the increase in demand probably has to do with bitcoin’s apparent stability, since it’s been around for a long time compared with many cryptocurrencies.

“It’s the same reason that people always get into bitcoin now as ever,” he concluded.

Blockchain and bitcoin technologies are still fairly new and misunderstood by people. When it comes to the use of bitcoin by people around the world one has to wonder if intellectual property or property laws will cover it. The article from Bitcoin Magazine dives into this question.

Making the Case for Bitcoin as Legal Property

“Interests in bitcoin should be protected by property law,” the Perkins Coie white paper concludes.

As Bitcoin is adopted by more users every day, the need to determine how it can integrate into mainstream society becomes even more pressing. One major question continues to be how traditional laws apply to Bitcoin and its use.

Many of those determinations could have major implications for Bitcoin and its holders, and few will play a bigger role in the United States than property laws, which could ultimately govern ownership over the digital currency.

A new white paper, “Treatment of Bitcoin Under U.S. Property Law,” seeks to analyze how the worlds of digital currency and property law should intersect. The report was assembled by Perkins Coie, an international law firm that specializes in blockchain technology and digital currency and has been active in the space since 2013. While detailed and clearly well-researched, the paper’s foremost conclusion is straightforward and transparent.

“We conclude that property interests should exist in bitcoin under such law, and that multiple sources of persuasive authority provide additional support for that conclusion,” the paper’s authors, J. Dax Hansen and Joshua L. Boehm, wrote.

The paper begins with an overview of Bitcoin’s technological attributes and what those mean for how property law can apply to it. Using California state law as a benchmark and Bitcoin transactions as an example, the authors make their case.

“Parties may … enter into contractual arrangements in which one party entrusts partial or complete control of such private key(s) to a third party while still maintaining formal title to the bitcoin value represented in applicable [unspent transaction outputs],” the paper reads. “These kinds of contractual arrangements are commonplace in custodial, trust, and escrow settings, which have generated well-developed legal principles that should generally translate to bitcoin custodial contexts.”

The paper dissects academic articles from some of the country’s foremost law professors, who also, for the most part, support the idea that intangible property rights should apply to Bitcoin:

“Property law scholars who have encountered the bitcoin ownership issues in the context of broader, more theoretical undertakings have reached (or assumed) the same general conclusion … that is, interests in bitcoin should be protected by property law.”

The authors move on to describe how Bitcoin has been treated by other legal divisions, such as commodities and taxation laws, citing the fact that in court opinions and regulatory guidance under these specialties, the digital currency has been treated as property.

“Although the concept of ‘property’ is fundamentally a matter of state law in the United States, it is also important that bitcoin has been widely treated as (or assumed to be) property for purposes of other state and federal statutory regimes,” reads the paper. “These treatments and assumptions have already had substantial consequences for the bitcoin sector. They therefore constitute informal but persuasive legal precedent further indicating that bitcoin can be owned as property.”

In an acknowledgment that much is still to be determined around how U.S. laws govern Bitcoin, the authors also included a section looking at the challenges to treating the digital currency as legal property. These include the multisignature arrangements, pseudoanonymity and potential lack of traceability associated with the Bitcoin platform. However, the authors remain optimistic that these challenges can be overcome as the technology develops.

“To be sure, difficulties in tracing ownership of particular bitcoin units across successive owners could cause some challenges in certain commercial use cases,” they wrote, but “blockchain technology itself has enabled, and will likely continue to enable, solutions to obstacles that do arise.”

It does appear that the worlds of Bitcoin and formal legal precedent are rapidly coming to a head. As the turning point approaches, familiarity with relevant legal precedent will be crucial.

If you are running a new blockchain startup or are in the beginning steps of creating a company then this article is worth reading. As currency evolves technologically, banks and exchanges will have more ties to the blockchain industry. Nasdaq has announced they want to become more involved in blockchain technologies by investing in those types of companies. Read more about this in the article from CoinDesk below.

Nasdaq Wants to Invest in More Blockchain Startups

Exchange operator Nasdaq is looking to invest in blockchain startups as part of a new venture initiative.

Nasdaq Ventures, announced today, has set its sight on investing in companies that work with blockchain, as well as firms focused on artificial intelligence, next-generation data analysis and machine learning. The firm will invest as much as $10m in relevant startups, focusing on both seed-stage and late-stage placements.

The effort is perhaps a natural extension of the exchange operator’s work in the blockchain space. In mid-2015, Nasdaq partnered with blockchain startup Chain in an effort that saw the two jointly develop a distributed ledger market focused on pre-IPO offerings.

Adena Friedman, president and CEO of Nasdaq, said in a statement:

“With the launch of our new venture investment program, we are reinforcing our focus on driving growth and innovation by evaluating, distributing, licensing and integrating disruptive technologies for the long-term benefit of our global clients.”

The operator has been testing blockchain elsewhere as well.

In February 2016, Nasdaq revealed it was testing a blockchain e-voting prototype with Estonia’s sole securities exchange. Further, in January, Nasdaq released a report outlining that, in its view, the trial “successfully demonstrated” why it believes blockchain use cases will extend beyond transaction settlement.